Market Snapshot

Stocks

Toronto stocks closed little changed amid caution ahead of the results of the elections in the U.S., capping a session that was devoid of significant domestic drivers. The S&P/TSX Composite edged up 8.42 points, or 0.1%, to 12361.20, and advances led declines 837 to 781, preliminary data showed. The blue chip S&P/TSX 60 Index rose 1.17 points, or 0.2%, to 708.00.

Credit Markets

Demand for Canadian government bonds crumbled amid improved market sentiment as Americans cast their final ballots in the U.S. presidential election. A heavy slate of new supply in the U.S. and Canada was also weighing on bond prices. Canada's two-year bond yield was at 1.114% late Tuesday, from 1.070%, late Monday, according to electronic trading platform CanDeal. The 10-year bond yielded 1.770%, from 1.759%. Bond yields move inversely to bond prices.

Forex

The Canadian dollar surged higher against its U.S counterpart, rallying alongside U.S. equity markets as investors looked ahead to the imminent end to the U.S. presidential campaign. The U.S. dollar was at C$0.9918 late Tuesday, from C$0.9964 late Monday, according to data provider CQG.

Oil

Fueled by a strong Election Day jump in equity markets, crude futures surged 3.6% higher. Analysts said there were no crude-specific headlines during the trading day that accounted for the oil rally, which was accompanied by a 2.9% rise in gasoline futures. The increase in oil also was joined by a 0.9% rally in the S&P 500, which typically gets a boost on Election Day. Front-month crude for December delivery on Nymex jumped $3.06 to settle at $88.71 per barrel. Brent futures were trading $3.09, or 2.9%, higher.

Precious Metals

Gold snapped higher, as signs of an uptick in physical buying and a coming set of political and economic events pushed traders betting on lower prices to cash out. The most actively traded gold contract, for December delivery, gained $31.80, or 1.9%, to settle at $1,715 a troy ounce on the Comex division of the New York Mercantile Exchange. Silver for December delivery gained 2.9% to settle at $32.034 a troy ounce.

Quick Links

Tomorrow's Headlines

CIC Near Timber Deal With Brookfield

China Investment Corp. is close to purchasing a 12.5% stake in some timber assets in Canada from an infrastructure affiliate of Brookfield Asset Management for about $100 million, according to people with direct knowledge of the matter.

The move marks the latest effort by the Chinese sovereign-wealth fund to step up its investment in assets that could help shield its giant overseas portfolio from rising inflation risks.

CIC, which manages a chunk of China's massive foreign-exchange reserves, is expected to sign as soon as this week the deal with Brookfield Infrastructure Partners, which is partly owned and managed by Brookfield Asset Management, the people said. The Wall Street Journal reported in September that CIC was in talks with Brookfield about investing in timber and other types of infrastructure assets that could act as a hedge against inflation.

India, Canada Agree On Nuclear Cooperation Pact

India and Canada said they have concluded negotiations on a nuclear cooperation agreement that will take Ottawa one step closer to starting uranium exports to the energy hungry south Asian economy.

Canadian Prime Minister Stephen Harper said he is looking forward to implementing the nuclear agreement, although the two countries didn't elaborate when this could happen.

"The conclusion of the administrative arrangement with India will facilitate opportunities for Canadian companies to play a greater role in meeting India's growing energy needs," Mr. Harper said, according to a statement. "It is expected to generate millions of dollars in new business contacts between our countries and to create high-quality new jobs here at home."

India Pact Ensures Nuclear Material Not Used In Weapons

Canadian Foreign Affairs Minister John Baird said a nuclear cooperation pact with India will honor Ottawa's international obligations to ensure uranium exported from Canada isn't used in weapons programs.

Mr. Baird said Canada takes its international obligations on nuclear proliferation "incredibly seriously." He said the agreement with India "will not only help create a lot of jobs in Canada, it will honor all of our international agreements to ensure that Canadian nuclear material does not make its way into a weapons program."

Canada Purchasing Activity Expands In October

The Ivey Purchasing Managers Index was at 58.3 on a seasonally adjusted basis in October, indicating that purchasing activity in Canada expanded from September.

The index, which measures changes in economic activity as indicated by a panel of purchasing managers from across Canada, is sponsored by the Richard Ivey School of Business at Western University.

An index greater than 50 indicates an expansion of purchasing activity, while an index below 50 indicates a decline. The employment index for October was at 56.4, indicating employment was higher than in the previous month. The inventories index was at 48.2, indicating inventories were lower than in the previous month. The prices index was at 53.1 in October, indicating prices were higher than in the previous month.

HMX Seeks To Sell Canadian Affliate To Tom James

HMX Group is asking the U.S. Bankruptcy Court to approve the sale of Coppley, its men's clothing brand in Canada, to Tom James, a Tennessee-based men's suit maker.

As part of Coppley's Canadian insolvency proceeding, it is being sold as a going concern for $3.5 million to an entity set up by Tom James called Very Best Apparel. However, the intellectual property, including the Coppley brand name, is owned by HMX and thus the sale of that property requires the approval of the U.S. Bankruptcy Court in Manhattan.

Tom James offers both custom and ready-to-wear suits at its more than 100 U.S. and international locations, according to its website. Its holdings include cloth mills, suit manufacturers and other clothing companies.

Canadians Able To Use Bank Logins For Government Accounts

Canadians can now access their accounts with the Canadian government using login credentials from three of the country's largest banks, Toronto-based technology firm SecureKey Technologies said.

Toronto-Dominion Bank, Bank of Nova Scotia and Bank of Montreal customers will be able to use their bank IDs and passwords to access online government services, including Canada Revenue Agency and Service Canada, SecureKey said in a joint release with the banks. It's the latest step towards creating a digital identity ecosystem in Canada that's secure, convenient and easy to use, the company said.

Other banks are expected to participate in "the coming months," said SecureKey's marketing head, Robert Blumenthal, in an interview. He expects provincial governments to follow suit and said SecureKey is working with technology vendors to embed SecureKey authentication technology inside mobile phones, laptops and tablets.

National Bank Financial Names New Sales Co-Head

National Bank Financial, the investment-banking arm of National Bank of Canada, has appointed Jeff Clap as co-head of institutional sales based in Toronto, replacing Sinclair MacDonald, who has left the dealer, a spokesman confirmed.

Jean-Philippe Cousineau continues in his role as co-head of sales, based in Montreal, the spokesman confirmed. Mr. Clap's appointment "is part of a regular process of reviewing talent and allowing promising leaders to move up," the spokesman said. Mr. MacDonald couldn't immediately be reached for comment.

Japan Panel OKs Easing Of Beef Import LImits

A Japanese health ministry panel on food safety agreed on recommendations about easing U.S. beef imports, a significant step toward lifting restrictions that remain a sore spot in Japan-U.S. trade relations.

The report said raising the upper age limit on animals whose beef can be accepted for importation to 30 months from 20 months "posed little risk and its impact on human health would be negligible."

The report applies to beef from the U.S., Canada, France and the Netherlands. Currently, all beef from France and the Netherlands is banned, while only beef from cattle 20 months old and younger is accepted from the U.S. and Canada.

Talking Points

Dynamic's Gibbs Plays Defense With Utilities

Utilities aren't just for widows and orphans anymore.

With bond yields at historic lows and equity markets volatile, regulated publicly traded utilities that offer steady, dependable income and profit growth have become highly sought-after. Big pension, private-equity and sovereign-wealth funds are snapping up good infrastructure plays, making them increasingly scarce and driving up their value.

"If you own great infrastructure, it's similar to owning great real estate," said Jason Gibbs, manager of the Dynamic Global Infrastructure Fund, a five-star rated fund, with a three-year annualized return of 13.3% versus 4% for its peers, according to Morningstar Canada.

About 41% of the fund is in utilities, with another 23% in energy infrastructure and 11% in industrials and the reminder in financials, telecom and consumer discretionary stocks. Top holdings include United Utilities Group, Transurban Group, Severn Trent, American Tower REIT, Enbridge and TransCanada.

"The beauty with pipelines is they are the toll road of the energy world," said Mr. Gibbs. "They have a stable business with recurring cash flows and also a lot of growth, or more growth than you'd expect because they're building new pipelines to keep up with. It's like a rebuilding of the inter-state highway system, when you look at energy-infrastructure with shale oil, oil sands, shale gas."

He expects Enbridge's dividend to grow about 15% a year in the next five years.

United Utilities and Severn Trent, U.K.-based water utilities both rumored to be takeover targets, aren't going to "blow out the lights but are incredibly defensive," he said.

The biggest risk to owning utilities is regulatory.

"You can have a great utility but if your regulator is always trying to cut your returns or not allow you to pass through certain costs, then it really doesn't matter," said Mr. Gibbs. "You want to have a good regulator."

That concern has kept him from investing in countries like Germany, Spain or Italy.

The fund once owned Italian toll road operator Atlantia, but changing tax policies in Italy, one of the troubled euro-zone countries, keeps him from buying it again. "How can you buy that as an investor not knowing what the actual tax rate is going to be because the government has been changing its mind? I have no visibility into cash flows," he said.

Regulators in Canada, Australia, the U.K. and the U.S. are more reliable, even with the U.K. in a recession and the U.S. facing a fiscal cliff, he said. "They get it," said Mr. Gibbs. "When you're suffering for capital, you want to try to make yourself the most hospitable to private capital."

Contact Us

Replies to this message are routed to an unmonitored mailbox. If you have questions please email us at newswires@dowjones.com. You may also call us at 1.800.223.2274.

Want to send a co-branded daily version to your valued clients?

Dow Jones offers subscribing firms the opportunity to co-brand Tomorrow's News Today for redistribution to their clients. If your firm is interested in co-branding, please contact us at newswires@dowjones.com or 1.800.223.2274.

Copyright Dow Jones & Company, Inc.

Tomorrow's News Today is made available as a complimentary service to Dow Jones News Service paying subscribers. No further redistribution is permitted without written permission from Dow Jones. Tomorrow's News Today is intended to provide factual information, but its accuracy cannot be guaranteed. Dow Jones is not a registered investment adviser, and under no circumstances shall any of the information provided be construed as a buy or sell recommendation or investment advice of any kind.